NFT marketplace, Opensea has weighed in on the highly anticipated NFT royalties debate rolling out a new “on-chain” tool to assist creators in enforcing royalties.
Lately, the topic of NFT royalties has sparked a heated debate. It is worth noting that such kind of royalties makes it possible for artists, in general, to sustain and continue producing quality work as long as their artwork is sold. However, the NFT marketplace has been silent on the subject of royalties and enforcement. But, OpenSea has finally come clean on the argument launching a new “on-chain” tool to help creators enforce royalties.
A Brand New On Chain Tool
There’s been a lot of discussion over the past few months about business models for NFT creators & whether creator fees (“royalties”) are viable.
Given our role in the ecosystem, we want to take a thoughtful, principled approach to this topic & to lead w/ solutions. 🧵
— OpenSea (@opensea) November 6, 2022
According to an official blogpost, OpenSea CEO Devin Finzer stated the royalty enforcement tool only applies to new NFT collections at this stage, with a decision to be made on existing collections at a later date. He explained the company is also considering options ranging from continuing to enforce off-chain fees for some subsets of collections, to allowing optional creator fees and collaborating on other on-chain enforcement options for creators. Finzer wrote,
“Starting at 12pm ET on Tuesday, November 8, OpenSea will enforce creator fees only for new collections that use an on-chain enforcement tool such as this one.”
As per the blog post, the on-chain tool will be a ”simple code snippet” that creators can add to future NFT contracts, as well as existing upgradeable contracts. This code restricts NFT sales to marketplaces that enforce creator fees. The tool also won’t be rolled out for existing NFT collections for the moment due to implementation challenges. Finzer added,
“OpenSea will enforce creator fees for new collections that use an on-chain enforcement tool. OpenSea will not enforce creator fees for new collections that do not implement on-chain enforcement.”
Are NFT Royalties Necessary?
The vast majority of NFT enthusiasts are in favor of creator royalties. Many have even taken to social media to defend this facet of the NFT ecosystem. But while artists and collectors are undoubtedly spearheading this debate, AMM platforms like sudoswap and NFT marketplace X2Y2 have emerged as the most prominent opponents of creator royalties.
I don't fundamentally agree with the removal of royalties though but I do appreciate this execution. There has to be give and take with these things.
Recognizing you are making a (unavoidable) change that harms your audience but also simultaneously presenting a solution.
— wab.eth ❁ (@wabdoteth) November 6, 2022
There has been mixed reactions among several NFT creators and the Twitter community after OpenSea’s decision. Wab.eth, founder of the Sappy Seals NFT collection and co-founder of The Pixlverse and Pixl Labs, tweeted,
“While I don’t fundamentally agree with the removal of royalties, I do appreciate this execution.”